Shares of Netflix (NASDAQ:NFLX) have jumped today, up by 5% as of 1:30 p.m. EDT, after the dominant video streamer received two price-target bumps from Wall Street analysts. Meanwhile, peer Roku (NASDAQ:ROKU) said yesterday that it was seeing higher engagement on its streaming TV platform due to coronavirus-related lockdowns.
BofA Securities increased its price target on Netflix shares from $426 to $460 while reiterating a buy rating. Analyst Nat Schindler believes that the pandemic will create a surge in demand for video streaming. BofA thinks Netflix will post better-than-expected subscriber additions when it reports first-quarter results next week. Schindler is modeling for 8.4 million paid net additions, which would be ahead of the consensus estimate of 7.5 million. However, the strong likelihood of a recession on the horizon may mitigate some of those gains as the economic impacts of the coronavirus pandemic continue to materialize in the quarters ahead.
Imperial Capital analyst David Miller similarly reiterated an outperform rating while boosting his price target on the stock from $438 to $447. Miller is modeling for 7.3 million net additions in the first quarter, while noting that Netflix's own guidance of 7 million net additions was issued before the public health crisis had escalated meaningfully.
Roku yesterday provided investors with updates around its own streaming business, which has seen large increases in active accounts, as well as hours streamed. While Roku's platform segment may take a hit in ad revenue, Netflix does not have an advertising business and only offers paid subscriptions.
Netflix will report first-quarter earnings on April 21.